Hackel, Miller recommend $25M refund to communities for Highland Park’s water debt

Macomb County executives are calling on the Great Lakes Water Authority to give its recent surge in federal stimulus funding to communities that have absorbed the costs of a debt dispute between Highland Park and the water authority.

Macomb County Executive Mark Hackel and Public Works Commissioner Candice Miller wrote a letter to local government officials in the county on Tuesday contending communities that contract with the water authority should receive the $25 million federal windfall recently allocated to the GLWA by the state government. The stimulus funding was appropriated to GLWA to promote access to drinking water. 

GLWA customer communities that have absorbed Highland Park's debt should receive the entire $25 million stimulus as a refund, Macomb County officials said, contending the refund would help those communities maintain water affordability.

"The local communities can best decide how to use this partial refund," Hackel and Miller said. "The refund will not relieve Highland Park of its obligations, but will provide partial relief to those ratepayers unfairly burdened over the past 10 years."

In March, 18 communities in western Wayne County declared they intend to withhold a portion of their water and sewer bills tied to $54 million in disputed Highland Park debt.

A conference representing the western Wayne communities had voted in favor of a resolution on March 11 to withhold the money after the Great Lake Water Authority sent letters to the leaders of its 87 other customer communities, who were being asked to pick up the arrearage.

Highland Park contends it does not owe any money and is due $1 million, citing a 2021 Wayne County Circuit Court ruling. The Great Lakes Water Authority late last year sued Highland Park in the Michigan Court of Claims over the funds, but the case has been paused. 

The debt dispute dates back to 2012, when Highland Park had to move to the GLWA because it had cloudy water in its own system. The water authority contends the city has underpaid its bills since then, while Highland Park says it has been overcharged.

By the end of March, leaders of 20 communities in the Downriver area of Wayne County also voted to withhold the portion of their water bills owing to Highland Park's debt.

This month, Gov. Gretchen Whitmer urged the GLWA to pause the planned July 1 rate increase it had attributed to the debt.

Whitmer said she has not taken a side in the dispute but shares the frustration of communities that the authority has asked "to bear expenses that remain the subject of ongoing litigation."

More:Whitmer to Great Lakes Water Authority: Delay Highland Park debt-related price hikes

The authority plans to institute a wholesale water rate hike of 3.7% and sewer rate hike of 2.4% in the 2023 fiscal year. Almost half of the sewer rate hike is attributed to Highland Park's debt. 

Hackel and Miller recommended communities not withhold payments to the authority because it could hurt the authority's bond rating and end up costing communities more money.

"These communities have had to pass on higher water and sewer rate increases for the past 10 years to subsidize over $54 million in unpaid costs of another community — a community whose leaders claim it alone has the right to pay in perpetuity the same fixed GLWA rate it paid over 25 years ago," Hackel and Miller said in a press release.

"Despite years of litigation, appeals and prior State involvement, the amounts owed have only grown with possible court judgments likely bankrupting that community."

ckthompson@detroitnews.com